Until recently, tech firms were setting up headquarters outside major metropolitan areas, sprawling out of cities to create business ‘villages’ where everyone was working in the same industry. One of the best examples is Silicon Valley, a well-known center that brought together major tech players and start-ups. However, these businesses have started to move their offices inside big cities like New York, San Francisco, Los Angeles or London.
As we’ve discussed before, young workers are less interested in owning cars and big houses – they prefer apartments in central locations and being able to use a well-functioning, versatile public transit system. They also like to be able to walk or cycle to work, so their office needs to be fairly close to their home.
Although Silicon Valley and other suburban tech centers provide many places for socializing during or outside of work hours like bars and restaurants, these options are obviously much more limited than they would be in a city, where they are much more varied. This variety applies to both the services and products they offer and for the customers they have – you’re not going to see the same people every day, something that may eventually become a nuisance in suburban centers.
Another compelling reasons for moving tech to the city is the fact that the nature and the speed of technology are changing – companies can have smaller teams and smaller footprints, and they are more successful when they stay in close contact with their end-users, which is much easier to do in a city.
Urban tech centers – mixed results for the community
The Royal Town Planning Institute in Britain warns that while the tech sector does bring major contributions to a country’s GDP, it is not very effective in sending out positive economic ripples to the rest of society. Economic segregation, alienation and displacement of long-term residents who are priced out of their neighborhood are common occurrences.
Here are some of the researchers’ suggestions for improving the relationship between tech companies, communities and governments:
- Provide jobs for locals
Tech companies set up in urban areas tend to import their workers from elsewhere, as low-income citizens from the surrounding neighborhoods don’t have access to the training they would need to be able to work in these companies.
Cities can introduce various training courses at local schools or colleges in order to attract locals to earn skills that are valued by tech companies. Additionally, these companies can be encouraged to pool expertise with local businesses as often as they can.
- Encourage regeneration
Local governments should suggest that tech companies move into buildings or areas that are not obvious contenders for business space, like old warehouses, industrial buildings or other sites that are in need for rehabilitation.
- Improve public services and infrastructure
Tech companies can help communities by making some of their existing technologies available to municipalities and thus form a better partnership that benefits everyone. For example, cities in the UK have been using GPS mapping for waste collection, which resulted in substantial savings. Any contribution a tech firm can bring to the public system is extremely valuable. Cities can also begin long-term collaborations with these companies to conceive and implement smart solutions to various infrastructural issues.
Sources: wsj.com, citylab.com